Volume 38, Number 2 (Spring) 2003
Frankenberg, Elizabeth, James P. Smith, and Duncan Thomas. 2003. "Economic Shocks, Wealth, and Welfare." Journal of Human Resources 38(2):280-321.
The immediate effects of the Asian crisis on the well-being of Indonesians are examined using the Indonesia Family Life Survey, an ongoing longitudinal household survey. There is tremendous diversity in the effect of the shock: for some households, it was devastating; for others it brought new opportunities. A wide array of mechanisms was adopted in response to the crisis. Households combined to more fully exploit benefits of scale economies in consumption. Labor supply increased even as real wages collapsed. Households reduced spending on semidurables while maintaining expenditures on foods. Rural households used wealth, particularly gold, to smooth consumption.
Elizabeth Frankenberg is an assistant professor of sociology at the University of California, Los Angeles. James P. Smith is a senior economist at RAND. Duncan Thomas is a professor of economics at the University of California, Los Angeles. This paper was prepared for the HRS/NLS/PSID/ISR Conference on Cross-National Comparative Research Using Panel Surveys, Ann Arbor, Michigan, October 2000. The authors are grateful to Francois Bourguignon, John Strauss, Jim Walker, and two anonymous referees for many helpful comments and suggestions. Financial support from the National Institute on Aging (AG0829I), the National Institute of Child Health and Human Development (HDI2639, HD28372, and HD40245), and the National Science Foundation (SBR 9512670) is grateful acknowledged. Addresses for correspondence: efranken@soc.ucla.edu , smith@rand.org , dt@ucla.edu
© 2003 by the Board of Regents of the University of Wisconsin System
US ISSN 0022-166X